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Sen. John Thune (R-S.D.) said adding a mandate repeal could allow Republicans to include more middle-class tax relief in the tax bill, and that he was confident it could pass the Senate. | John Shinkle/POLITICO

Hatch adds repeal of Obamacare mandate to tax bill

Republicans view repealing the mandate as both fulfilling a campaign pledge and a source of revenue.

Senate Republicans have added therepeal of Obamacare’s individual mandate to the latest version of their tax bill, with several key swing votes saying they’re open to the idea.

Late on Tuesday, the chairman of the Senate Finance Committee, Orrin Hatch of Utah, released a new bill that would eliminate the mandate’s fines beginning in 2019.The addition was discussed at a closed-door party lunch meeting earlier in the day, and several Republican senators said no one spoke out publicly against repealing the mandate.

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The GOP views the repeal as both a down payment on its campaign pledge to undo the Affordable Care Act and as a source of revenue: It would generate $338 billion to help pay for changes in the tax plan.

In a statement, Hatch said it would allow even steeper cuts in individual tax rates — to 22 percent, 24 percent and 32 percent — ensure that a corporate rate cut is permanent and “work to address” the bill’s problems with budget rules. However, a raft of tax cuts for individuals would become temporary under his revised plan, expiring after 2025.

Sen. John Thune (R-S.D.) said he was confident that it could pass the Senate.

“It’s been whipped,” said Thune, a member of the GOP leadership, adding that it’s an idea “we’ve been looking at for some time as a potential solution for some of the challenges that we’re facing in trying to make the bill do the things we’re trying to accomplish.”

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President Donald Trump has been urging congressional Republicans to include the mandate’s repeal in the tax package.

Senate Majority Leader Mitch McConnell said Republicans were “optimistic that inserting the individual mandate repeal would be helpful” to enacting tax changes.

Later on Tuesday, he told a Wall Street Journal CEO Council event that the savings would help, “plus, every single member of my caucus … is opposed to the individual mandate. It is the most unpopular part of the current health care law.”

John McCain (R-Ariz.), one of three GOP senators who voted down the Obamacare repeal effort this summer, said repealing the mandate was not a deal breaker for securing his vote.

“I want to see the whole package — it keeps changing as it goes through the House and Senate,” McCain said. “I want the regular order.”

Repealing the requirement that most Americans have insurance would have an effect on the health insurance markets, although not as big as health economists once predicted. The Congressional Budget Office said this week that repeal would result in 4 million people losing their health insurance in the first year and 13 million in a decade.

Several Republicans said they hoped to pass a separate bill to fund Obamacare’s cost-sharing program to shore up the insurance markets, to make up for some of the negative effects on coverage that a repeal of the mandate would deliver. Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) have released a bill that would fund the program.

Alexander said that if Republicans repeal the mandate, “Republican support for the Alexander-Murray bill will be very strong.”

Referring to the government funding talks, Senate Majority Whip John Cornyn (R-Texas) said: “My expectation is that Alexander-Murray would be part of Dec. 8 negotiations. That’s still a work in progress, but I think that would be a good outcome.”

Republican Sens. Jeff Flake of Arizona and Bob Corker of Tennessee, who have both announced that they won’t seek reelection next year, separately said they would support repealing the mandate if it helped get the tax bill done.

“I’m fine with it,” Corker said. “I would hope that if we do and there is real money there, that we use it as a buffer against any deficit in the first 10 years.”

Sen. Susan Collins (R-Maine), who opposed the repeal of Obamacare over the summer, said combining the two issues could make tax reform more difficult.

“My concern is that if we combine the health care issues with tax reform, we make it far more controversial,” she said.

Sen. Rand Paul (R-Ky.) said Tuesday that he would introduce an amendment on the Senate floor to undermine the mandate.

Because of arcane Senate rules, Republicans cannot technically repeal the mandate. Instead, they would change the fines to $0, which would have the same effect as repeal.

The House did not include repeal of the mandate in its bill, which is slated to be voted on later this week. The chairman of the House Republican Study Committee, Rep. Mark Walker of North Carolina, and other House members introduced an amendment to the House Rules Committee to add repeal of the mandate to the House bill.

“Adding the repeal of the individual mandate to tax reform could be the most consequential step this Congress takes to date in fulfilling our promises to the American people to both reform the tax code and repeal Obamacare,” Walker said in a statement. “It appears the Senate is keeping its promises. The House should do the same.”